why are we here

the idea is to take suo motu control over situations that have a bearing on our lives. 'suomotu' would mean this has come on our own motion. the question is 'was this required', and let's answer it in a strong 'yes'. legislators, public figures, analysts can no longer decide our fate or the way we judge events; we are free, equal, accountable to our own good. here we come to discuss, to decide and to persuade.

npa

the world is becoming ultra-competitive, all thanks to greater than ever dissemination of information through electronic means. today, no company (except those with cutting-edge tech like google and microsoft) operating in a specific industry can expect to be the sole beneficiary of demand for a particular product/ service. margins are getting thinner and this is all a good sign, we will tell you why. for a country like ours, all problems lie in income disparity that has only exacerbated despite of political promises to curb it. with those who earn handsome money and are willing and actually spending large sums on imported goods like electronics and garments, our trade balance has suffered. this ‘handsome money’ that they make can be attributed to the irrationality of their employers. companies, both private and public, have not prudently considered changing market conditions and are thus unable to rein in rising operating expenses, especially those incurred on salaries. take airtel for example. post jio’s

the 2 percent wage hike proposed by indian banks’ association to psb employees is unacceptable to them, and they have their own set of reasons. just one question- are present pay structures of psb employees commensurate with their skills and duties they perform? when one compares the monthly pay of an sbi staffer with that of a private sector staffer with identical skillsets, say with an accountant at a private enterprise, the picture that bank staffers are already drawing exceedingly high salaries becomes clear. for decades, public sector banks misused and severely abused their dominant positions, which is owing to the general public viewing these banks as quasi-government, not just government-run banks. people feel safe when their savings lie with public sector banks and this compulsion of people to use the services of psb has been exploited to the core. sbi, for example, not only pays lucrative and unreasonable salaries to probationary officers and other staffers, but also takes care

the bjp is in power in most indian states and its feat in the north-east is an evidence that voters are decisively backing the pro-development and reformist stance of the prime minister. so the perfect time to bring long-pending reforms in banking is now. when indira gandhi brought bank nationalisation in 1969, the move that was although opposed by many in her own party, went down well with the general populace, only because people viewed it as furthering their interests. even at that time, nationalising banks wasn’t the most preferred action to bring a change in how banks functioned; it was thought that banks were operating as agents of few corporates, while the needs of underprivileged classes were not being paid heed to. the then Indira-led government, prior to bringing the nationalisation ordinance, brought the scheme of social control over banks (which couldn’t last long), where a national credit council was established with finance minister as head and representatives of

while everyone is counting the exact figure of non-performing assets, no one has taken time to see how messy, obsolete is the slip that is to be attached when depositing cash in a public sector bank. the modus operandi of government banks has led them to where they stand today; india’s so-called gem of banking sector, state bank of india, has posted a quarterly loss for the first time in 17 years. cut to solution. divestment is the only option to revive indian public sector banks, and yes this can come with challenges hence the need is to think of an appropriate method of divestment. when divestment is considered, we only think of making a public sector unit private by way of selling the stake of the government. this, however, can be a kneejerk decision. what is the alternative then? form a government trust and handover the stake currently held by government in public sector banks to this trust. yes,

country’s banking system is reeling under non-performing assets and a solution is being sought by way of forced bankruptcy, takeover of management and rulings by national company law tribunal. this basically means that the disease is being cured after it has managed to inflict irrevocable damage. a simple tool, in the form of ‘irreversible debit order’, can however bring an end to this by immunizing banking companies against loan defaults. an ‘irreversible debit order’ or ‘ido’ can work as an instrument of repayment of debt facility availed by the borrowing entity from the lender. in the present setup, the borrower, who either pays through cash/ cheque or an instruction in form of automatic monthly debits from bank account toward repayment schedule, has an upper hand. the borrower can either choose not to make the cash/ cheque payment on the pre-decided date or he can instruct his bank to not allow further automatic debits from his/ company’s account toward loan repayment.

no two industries will be functioning alike, impacting the economy in same manner; hence both cannot be subjected to identical degree of taxation on income. rational segregation of enterprises is the foundation of this notion. any enterprise would be involved in either an ‘essential’ or ‘complimentary’ production. steel, consumer goods as essential, and telecom, information technology as complimentary. we know that contribution from primary, secondary and tertiary sectors makes up country’s gdp. primary sector includes agriculture, mining and like, secondary includes manufacturing, electricity and like, and tertiary includes all services. alike taxation of companies functioning in different sectors is irrational in long run. let’s understand why. an enterprise undertaking mining activities has dissimilar factors of production as compared to another that produces computer programs. the risks in agriculture or manufacturing sector outnumber those in tertiary sector, while margins of latter outdo that of former. for instance, retail works on the difference in price charged from buyer to what was paid

lately, a private bank partnered with an online taxi-hailing company to help people get cash at their doorstep by just ordering the amount over mobile app and with a simple swipe of bank’s atm card. that’s out-of-the-box thinking, this is called managerial vision and an astute approach to serve customers no matter how hard the time is. but what about our public sector banks? you must know that indian public sector banks (psbs) have a wider customer base than their private counterparts, while private banks run on principles of wise management, psbs depend on government’s budgetary allocation for their recapitalisation. sad, non-performing assets of psbs are all-time high and they outdo the figures of private banks on this account, a clear indication of sub-standard management. in the wake of demonetisation, when common man rushed to banks to avail of new currency notes, psbs weren’t just out of ideas on how to deal with the sudden rush, they even allowed unscrupulous elements